Purpose a statement of cash flows

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Reference no: EM1310052

On the basis of the following data for Seller Co. for 2008 and the preceding year ended December 31, 2007, prepare a statement of cash flows. Use the indirect method of reporting cash flows from operating activities. Assume that equipment costing $125,000 was purchased for cash and equipment costing $85,000 with accumulated depreciation of $65,000 was sold for $15,000; that the stock was issued for cash; and that the only entries in the retained earnings account were net income of $51,000 and cash dividends declared of $13,000.

	Year 2008	Year 2007
Cash	$90,000	$ 78,000
Accounts receivable (net)	78,000	85,000
Inventories	106,500	90,000
Equipment	410,000	370,000
Accumulated depreciation	(150,000)	(158,000)
	$534,500	$465,000
Accounts payable (merchandise creditors)	$ 53,500	$ 55,000
Cash dividends payable	5,000	4,000
Common stock, $10 par	200,000	170,000
Paid-in capital in excess of par-- common stock	62,000	60,000
Retained earnings	214,000	176,000
	$534,500	$465,000

Reference no: EM1310052

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